Abstract

This essay is concerned with the implications of these structures
in markets for nonrenewable natural resources. Following Hotelling
(1931) and numerous subsequent authors, we assume that the total
reserves of the resource in the hands of each producer cannot be
increased and are reduced by production. Demand and cost conditions,
including the relevant rate of interest, are constant over time. In
such a world, producers must rationally consider price or output paths
over time, so that both models outlined above become non-zero sum differential games. In what follows, we examine solutions to the
games implied by various assumptions.